That a supplementary sum not exceeding £22,000,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1986, for the salaries and expenses of the Office of the Minister for Social Welfare, for certain services administered by that office, for payments to the Social Insurance Fund, and for sundry grants.
It gives me great pleasure to introduce this, the second Supplementary Estimate for my Department for 1986. The original Estimate for my Department passed by Dáil Éireann on 20 June last was for £1,530,695,000. On the same day the House passed a Supplementary Estimate for a token £1,000 to provide for the pilot schemes for the unemployed, bringing the total provided for the Department in the current year to £1,530,696,000.
The second Supplementary Estimate which we are now discussing is for a further £22 million and is required principally to meet the extra costs resulting from the Christmas bonus payments to be made this week to recipients of long term benefits. Extra expenditure also arises from the special measures agreed by the Government to assist those who are affected by the implementation of the provisions of the EC equality directive. The Supplementary Estimate additionally provides for a number of other adjustments of the voted provisions to take account of emerging excesses and savings on various subheads and I will refer to them in more detail later in my speech.
Of the £22 million now being sought, the bulk — £18 million approximately — is required to finance the Christmas bonus which the Government are again providing this year. We have been over the ground on this subject already in the House and I do not intend repeating all that has been said before.
The Christmas bonus — an average payment of £36 to our claimants — is, under our difficult circumstances and at the end of a period of huge increases in spending on social welfare, a considerable achievement. Let us put it in context — a further £18 million is being put into the pockets of our claimants, on top of the extra money for the 46,000 families who have benefited under the equal treatment directive. Who would not, in this House, be happier if twice or three times that amount were given to those among the Christmas bonus recipients who are the genuinely needy but who in this House is unaware of the intense pressure our finances are under, pressures which if not controlled will threaten the welfare of those very people we most want to protect.
I am very glad that the Government were able to find £18 million for the bonus payment this year. I want to emphasise that this money was found from specific identified savings in the Votes of other Government Departments. It was not raised by borrowing. This may not mean very much to the people on the other side of the House who see absolutely no difficulty about borrowing more money if this means buying popularity. Of course, this Government would have liked to make money available for the Christmas bonus, but we decided to approach this in a responsible way and to finance the bonus without increasing the burden on the taxpayer.
By any standards £18 million is a very considerable sum of money. We have found this money and are happy to be able to use it in this way. I have said it before and I will say it again, those who propose a higher level of bonus should say where the money will come from, but they never do. As we all know, it is very easy to spend money when you are in Opposition and when you do not have the difficulty of finding it.
I also know from the debates we have had on this subject that the people on the far side of the House like to convey the impression that they are the guardians of the poor and to parade their concern for people on social welfare payments. It bears repeating, therefore, what this Government have achieved for social welfare recipients, though I know that the Opposition find it difficult to cope with this reality. We have succeeded in reducing the level of inflation and, as everybody knows, the people who suffer most from high levels of inflation are people on social welfare payments. Furthermore, we have increased social welfare payments generally by amounts well ahead of the rate of inflation. In the period from June 1983 to July 1986, social welfare benefits have increased by 30 per cent for short term recipients, 33 per cent for long term recipients and by 40 per cent for the long term unemployed. These increases represent very considerable real increases in benefit levels over this period — real increases of 6.5 per cent for short term payments, nearly 9 per cent for long term payments and 14.5 per cent for the long term unemployed.
Again, I have no doubt that everyone in this House would like to see double those increases at least, but a good step forward has been made. Taken together with the massive improvements in housing over those years, the help for disadvantaged areas in education and the establishment of modern health clinics and other support services, as well as the special fund for voluntary organisations dealing with the disadvantaged which this Government established and which has given almost £2.5 million to some 470 organisations, there has been an impressive leap forward in support for social welfare recipients of all kinds. In future, the Combat Poverty initiative — again, this Government's achievement — is relevant in the context of directing resources to where they are most needed.
I say all of this to refute absolutely any impression given by any Member of this House, or any other element whose methods of attention-seeking stoop as low as violence on the streets, that this Government have anything less than an outstanding record of concern for the disadvantaged in Ireland. This Government have never tried to conceal or minimise the difficult financial situation which faces all areas of Government expenditure and the need to direct our limited resources in the most effective and equitable way. Our achievements in operating within these constraints are there for all to see.
I should like to mention a few words about those initiatives on which I spoke earlier which all amount to support for the disadvantaged. One of the problems which we identified when we came into office was the very poor and disorganised state of buildings in the community care area. Significant progress has been made since then especially on the buildings front. Over 15 new health centres have been or are in the process of being developed. We constantly monitor this area because we give priority to the development of the whole area of community care.
An additional capital programme, which is called the small community care premises programme, was established in 1984. The aim here is to establish small-sized health centres equipped and staffed to high levels. On a larger scale, an action research programme has been set up in Waterford and this is now at the detailed planning stage. The objective here is to establish a large health centre suitable to the needs of a sizeable urban population. In the Dublin area negotiations are now nearly complete on the acquisition of a site for a major health centre in the Townsend Street area. This, as Deputies may be aware, was promised on foot of the closure of Sir Patrick Dun's Hospital. We have an impressive record in the area of establishing community health facilities which had been very much neglected in previous years.
Another area to which we have given considerable attention is public housing for the disadvantaged. It is important that the Dáil recognise that local authority housing has been virtually revolutionised. My colleague, the Minister for the Environment, Deputy Boland, gave very detailed figures when he was speaking on the Housing Bill. At one time it was said regularly that we had a housing crisis, but we now have adequate housing for those in need. I do not believe the present position could be described as a crisis. At the end of 1985 the number of those on the housing list for the Twenty-six Counties was 22,000 applicants which compares very favourably with the figure for one inner London borough of 26,000 applicants. This has been achieved through a combination of factors — the continuing high output of high quality local authority houses by the Government over a number of years, the introduction of the £5,000 grant scheme, the introduction of the Housing Finance Agency loans — and lately the restructuring of those loans — the increase in the income limits for SDA loans, the increase in the amount which can be borrowed under the SDA system and the introduction of a third type of loan. This means that many purchasers who might otherwise have been on local authority waiting lists now have the opportunity to purchase their own house. People are moving out of local authority houses and others can move into these vacant houses.
The combination of these incentives has meant that the target of making 9,000 dwellings annually available for letting, which was assessed in the national plan,Building on Reality, as being the target which should be striven for in order to adequately meet housing needs, has been exceeded comfortably in the last few years. Through a combination of the high output of new local authority dwellings completed and the impact of the £5,000 scheme, last year there were 11,500 dwellings made available for letting by the local authority which was considerably in excess of the target. The indications are that for this year we will again considerably exceed the target set out in the national plan.
The third area I mentioned was education. When I came into office as Minister for Education, one of the first things we did was to establish a special fund to help primary education in disadvantaged urban areas. This year we have allocated £750,000 to this project, 155 schools are benefiting, covering about 50,000 pupils. The fund is used mainly for the following purposes: purchasing books and materials, developing home and school community links, special grants to supplement the capitation grant to schools in disadvantaged areas, in-service training of teachers, and a special provision to some schools to enable them to purchase the necessary hardware to be associated with the project on computers in primary schools. That sort of initiative was positive discrimination in favour of the disadvantaged and, taken together with the Government's record on improving social welfare payments, is clear evidence of our concern for the disadvantaged.
This year more than 500,000 long term social welfare recipients will benefit from the Christmas bonus, including the long-term unemployed who were included in the Christmas bonus last year for the first time. Recipients will receive an additional 65 per cent of their normal weekly payments and arrangements have been made to pay the bonus this week so that families can plan their spending coming up to Christmas.
Two million pounds of the additional amount now being sought is required to meet the cost of the special measures which the Government have decided on to cushion the effects for some families of the implementation of the Equality Directive provisions. This question has also been debated a number of times in the House in recent weeks and Deputies will be aware of the issues involved.
Let me say first of all that I am very pleased at the long overdue arrival of equality in our social welfare system. For a long number of years women have been blatantly discriminated against in that system and I am proud that this Government grasped the nettle and that I personally have been able to see to it that the discrimination is ended for once and for all in 1986.
Nearly 50,000 people were treated as second class citizens until this measure was brought in this year. They were treated in a totally different way from married men, single men and single women. Why was that? Because of the old established and long out of date tradition that all married women were economically dependent on their husbands. Because of that, they got less money from the social welfare system if they were unemployed or sick and they got that lesser amount of money for a shorter time than anyone else. This was indefensible, and had to be put right, which it has been, at a cost of £18 million in a full year.
Another important area of discrimination in the social welfare code was that married women were effectively debarred from applying for unemployment assistance. This was based on the outmoded concept that married women are dependants and should be treated as such and not as independent persons with independent rights. The whole approach of the social welfare system was to treat married women in this way by treating them as dependants even where this was manifestly not the case and, on the other hand, to make it virtually impossible for a married man to be treated as a dependant. A husband could only be regarded as a dependant of his wife if he was incapable of self-support through mental or physical infirmity. And we had the ludicrous situation where, so long as a married woman was living with her husband, he was entitled to increases of social welfare payments for her, even though she might have substantial earnings of her own or might herself be getting a social welfare payment at the full personal rate. Quite obviously the whole system had to be changed as the entire approach was indefensible in a modern world and was bitterly resented by many people who were not so fortunate as to have two sources of income coming into the house. As has been mentioned in this House on previous occasions, that perception of injustice in our system was clearly seen in 1978 by the then Minister for Social Welfare, the present Leader of the Opposition. He made it quite clear that Ireland would be adopting the approach to remove this inequity between men and women in the system by not paying adult dependant increases to people who were not adult dependants.
The changes which have now been implemented have for the first time introduced a rational approach to the question of dependency in the social welfare system. This has been at a cost to some people and this was inevitable. We recognised from the outset that in applying the new concept of dependency losses would arise for some families. This is why we built into the legislation enabling powers to permit alleviating measures to be taken. Initially we provided for a £10 a week transitional payment in cases where both spouses were on benefit and where the application of the new dependency arrangements would have resulted in the loss to the household of the adult dependant increase. We have now doubled this payment to £20 a week.
The second type of case affected is where the spouse is in employment. The application of the legislation in such cases would mean that the husband would be at the loss of the adult dependant allowance and half the child dependant allowances. The initial alleviating measure exempted from this rule cases where the spouse is earning less than £50 per week. There is no loss whatsoever in such cases. Where the spouse is earning over £50 per week, the additional measure now proposed by the Government will provide for the restoration of half of the child dependant allowance plus a payment of £10 per week. This will considerably ease the application of the equality legislation in those cases also.
I am glad we have succeeded in having the equality legislation implemented and that we have, not without some difficulty, put in place a system of cushioning payments which will make the loss of income to some 20,000 married men less burdensome than full and immediate implementation of the directive of the EC. This Supplementary Estimate includes the cost of the extra help this year — some £2 million — on top of the £9 million which we have already provided by way of alleviating measures. I am very glad the Government could afford me the funds to do this.
Arrangements are being made to have payments made to all the relevant people, with any arrears due, well before Christmas and in the vast majority of cases by the end of next week. Advertisements have already appeared to this effect in the newspapers, and will continue to appear. As well as that, the offices of my Department are all fully aware of the situation and are informing people of it.
Let me now turn to another area of the Supplementary Estimate, that is, the pilot schemes for the unemployed which, I consider, are a very significant and farreaching initiative in providing active support for the unemployed. As I mentioned in my introductory remarks when the House passed the Estimate for my Department in June last, it also passed a Supplementary Estimate for a token £1,000 to enable me to introduce pilot schemes for the unemployed. The likely out-turn on these schemes during the current year is estimated at £27,000 and a further £26,000 is, accordingly, now being sought.
There are three schemes involved aimed at helping the long term unemployed get back into jobs. The overall level of unemployment continues to be the major social economic and political problem of our time, not just in this country but also in most other developed countries in the western world. It is not just the level of unemployment that has given rise to concern but the fact that the proportion of persons unemployed for a prolonged period has increased. We are all too well aware of the demoralising effect that long term unemployment can have and the implications that it can have on the financial circumstances of people and their families. Conscious of the needs of people in this category, the Government responded by introducing a new higher rate of unemployment assistance in 1983 for persons long term unemployed but while making better income maintenance provisions is essential it cannot be the only response and we must continue our search for other ways in which to help.
The pilot schemes which I introduced a few months ago are, I think, a worthwhile attempt to focus on the long term unemployed as a special target group. The schemes are attempting to tackle the problem by offsetting the difficulties which, perhaps, made some people unemployed in the first place and kept them in that state for so long. In a similar fashion, a special focus was placed some years ago on youth unemployment and a whole range of services was developed specially for them with very considerable success. In Ireland youth unemployment is now well below the level in the rest of the EC.
The pilot schemes have set out to tackle, head on, features of long term unemployment which keep some people out of the active labour force for months rather than weeks. In the first place, there is the well known fact that the longer people are unemployed the more rusty they are with regard to work habits and the less confident they become in their ability to compete for a job. They can also suffer from anxiety at failure to find jobs and this can result in depression and an acceptance that unemployment is their lot in life. The Jobsearch programme was specifically designed to tackle this problem. Under the programme, selected groups of persons, who have been long term unemployed, are given intensive coaching in jobseeking techniques and are given access to extensive facilities to put their training into practice. While participating in the course, which lasts for four weeks, a participant receives his or her normal unemployment payment entitlement.
The first Jobsearch programme got under way in three pilot locations, that is, Letterkenny, Limerick and Tallaght on 15 September 1986. The pilot programme will run for a period of six months. At this stage, two courses have been completed and a third is nearing completion. There is no doubt that the knowledge and skills imparted during the course were significant for the individuals concerned. However, feedback from the participants indicates that what was more important to them was the motivation they received from the course and the structure of the course itself which, in practice, helped them to carry out intensive job seeking activities. These skills will, undoubtedly, be of continuing benefit to them. I should say, also, that apart from those who have found employment as a result of the programme, quite a number of people who had the various options outlined to them have opted for places on suitable training courses with AnCO or have expressed an interest in the various other State schemes.
The second feature of long term unemployment that the pilot schemes were designed to tackle was the unemployment trap, that is, the fact that benefits can be withdrawn very sharply when a person finds even temporary and part time work and this, in itself, can be a disincentive to taking up such work. Of course, this is a reflection of one of the rigidities in the present system, rigidities which will have to be carefully examined and removed where possible to ensure that our welfare system is capable of responding to the changing needs of our society. It is important that our system offers as much encouragement and practical help as possible to people in these circumstances. Under the pilot part time allowance scheme a fixed allowance is paid to persons who are long term unemployed and who are able to secure regular part time work. Their earnings from the employment do not affect payment of the allowance which is paid instead of their unemployment payments. The allowance is payable so long as the person does not work for more than 24 hours per week.
This scheme also started in September and will run for a period of six months. It is in operation in Letterkenny, Limerick and Tallaght and in the catchment areas covered by Gardiner Street and Cork employment exchanges. The scheme has started slowly but I am confident that as knowledge of the scheme spreads it will prove to be attractive to a wide number of persons.
The third feature of unemployment we are aiming to do something about is the well known association between low levels of educational achievement and long term unemployment. This is an area I have a great interest in and one which I became even more conscious of while I was Minister for Education. I was, therefore, very pleased to be able to introduce the pilot educational opportunities programme which provides long term unemployed persons with the opportunity to attend full time education courses provided by the VEC. At the same time, they receive an allowance equivalent to their unemployment payment entitlement. The scheme will run to the end of the current academic year. We have managed to set up three classes with a total of 53 persons. One class has been set up in Tallaght and two in Limerick. Already we have received some very worthwhile feedback regarding the enthusiasm of the participants. It must be remembered that these people have been unemployed for some time and have made a great effort to overcome what I would consider understandable inhibitions in taking the decision to become students again. The level of interest expressed generally for this type of scheme is also very encouraging and is a recognition that there is a need for schemes on these lines. I hope that participants' aspirations will be met by the scheme.
As I have said previously, the three schemes will be professionally evaluated with a full report on their success at the end of the pilot period. While it is too early yet to form any definite conclusions about the outcome of the evaluation, the preliminary indications are that the schemes are proving to be a measure of real help to the long term unemployed. Of course, before we can take a decisions about extending these scheme to other areas we will have to await results of the evaluation that is currently being carried out. I would like to thank Deputy McCarthy for his co-operation when moving that Supplementary Estimate last June so that we could continue with these pilot schemes.
Another aspect of the Supplementary Estimate to which I would like to refer specifically is the provision in item 11 in subhead K — miscellaneous grants, a new division of the subhead — which is being opened to provide the necessary finances to continue with the national fuel scheme in the present season. A sum of £3.3 million is sought but this does not represent additional expenditure as there is an offsetting saving on item 10 of the subhead — supplementary welfare allowance — where the money for the national fuel scheme was initially provided.
The inclusion of this new item arises from the recent court decision holding the regulations made governing the scheme to beultra vires and the resulting need to provide for the 113,000 persons who would otherwise lose their entitlement to fuel allowances. It is a short term measures to preserve the entitlements of the existing beneficiaries pending a fuller examination by my Department of the implications of the court decision.
I should like to explain to the House the background to this decision. The national fuel scheme was introduced in October, 1980 to rationalise and extend haphazard arrangements then being implemented by various health boards to assist needy persons with their heating needs in winter. The scheme catered, as had the previous arrangements referred to, mainly for the old and the incapacitated and also for widows, deserted wives and others. It did not, however, include recipients of short term payments such as unemployment benefit and assistance, and disability benefit.
As the national scheme was a development of the former home assistance arrangements it was reasonable that it should operate under the supplementary welfare allowance scheme, which had replaced home assistance and this is what happened. The health boards administered the scheme under guidelines conveyed annually to the boards by means of departmental circular.
In December, 1984, in a case taken by a recipient of unemployment benefit, the High Court ruled that the issue of a circular did not constitute the exercise by the Minister of his powers to make regulations under supplementary welfare allowance legislation and that the exclusion of persons of any particular category was void and of no effect. The opening up of the scheme to persons not originally included would have had serious financial and administrative implications. Some 200,000 additional persons could be eligible at a cost to the Exchequer in a full year of £30 million extra.
Accordingly my predecessor made regulations in February, 1985 under the supplementary welfare allowance legislation, authorising health boards to pay fuel allowances to persons receiving specified long-term social welfare payments provided certain other conditions were fulfilled, such as the claimant living alone or only with dependants or other specified people. However, these regulations were also challenged and on 23 July 1986 in the High Court in the case of McLoughlin v The Eastern Health Board the judge ruled that these regulations too wereultra vires in that they purported to limit entitlement to fuel allowances to certain categories of social welfare recipient.
The Supreme Court has now upheld the decision of the High Court but has further decided that the article in question is not severable from the rest of the regulations governing the scheme and that the regulations in question areultra vires in their entirety. This means that from now there is no fuel scheme under the regulations.
In order to avert the situation in which the 113,000 persons eligible for allowances under the conditions in those regulations could no longer be paid the Government decided that for the present the national fuel scheme will be operated on an administrative, non-statutory basis. The scheme will not form part of the supplementary welfare allowances scheme and will not be subject to the legislative provisions underlying that scheme. The scheme will continue to be administered by the health boards with the same financial and other arrangements as heretofore.
I should like to point out that the urban scheme, which operates in 17 cities and towns, mainly in the east and south of the country is unaffected by the judgment and that the 70,000 beneficiaries under that scheme will continue to receive their fuel vouchers as heretofore. Obviously the present arrangements are in the nature of a holding operation until the scheme is reviewed in its entirety. I felt it necessary to mention those facts to the House.
Looking to the other main components of the Supplementary Estimate, Deputies will see a saving of £2.4 million on Subhead C. This, however, is more in the way of being an accounting adjustment as between the social insurance fund and the Vote in relation to the payments to An Post for the services which that body perform in the payment of pensions for the Department.
An additional £12 million is required for Subhead E — payment to the social insurance fund this year. The additional requirement is a net position taking account of likely savings and excesses in the expenditure of the various insurance scheme and a shortfall variation on the expected yield from contributions by employers and employees.
On Subhead G an additional £7.0 million is required for old age non-contributory pensions. Part of this arises because of the Christmas bonus and the remainder is by way of an adjustment with the old age contributory pension provision in Subhead E.
These are the main features of the Supplementary Estimate. This additional £22 million which we are devoting to the social welfare services at a time of continuing acute pressure on the public finances is an indication of the concern of the Government for those who are dependent on the social welfare system and highlights the efforts we are prepared to make, and will continue to make, to do the best we can for the weaker sections of the community.
It is necessary to emphasise once again the position in regard to calls for any additional expenditure on social welfare. There is an enormous budget for this area and there are various pressures that have driven that figure upwards each year. Some of these pressures are demographic and others are economic and those factors will be with us for the foreseeable future. I should like to put spending on social welfare into some context by reminding everybody that about 1.3 million people or about 30 per cent of the population, are in receipt of some form of social welfare each week. The total budget is £2.5 billion, the largest single block of Government expenditure and it runs at a staggering 27 per cent of total gross current expenditure. Another way of putting this is to say that we are spending £7 million for each day of the year. In the four years since we took office an increase of 50 per cent has been seen in the total expenditure on social welfare. Obviously, some of that comes from an increase in unemployment but a considerable amount comes from the real increases we have been able to give to those at the lowest level of social welfare payments.
We have had many calls for further expenditure in this area and I expect I will hear more today. It is time we realised we are at a financial crossroads. The debt we carry takes money away from the kind of provisions we would like to make in many areas of social expenditure but if we do not make strenuous efforts to reduce that debt there will be a squeeze on social expenditure that will make life for the people we most want to help even more difficult. Unfortunately, short term popularity can be bought by calls for more expenditure but that will be at the expense of the long term benefits of those on whose behalf the calls are being made. Interest on that debt is taking £9 out of every £10 paid by PAYE workers. If we did not have that type of debt not only would we be able to run the country with current taxation but we would have a surplus. We would have £2,000 million available to do all the things we want to do in regard to expansion and, in particular, job creation for our young people. That is the type of financial scenario we are facing.
It is necessary to make such points so that Members will be aware of the implication a further increase in that debt will have for the disadvantaged in our society. I expect that the matters covered in the Supplementary Estimate, the Christmas bonus, pilot schemes for the unemployed and the additional alleviating measures under the Equality Directive, will receive the support of the House. I commend the Estimate to the House.